The Business Case for Skilling

There is all round realisation that skilling of the country’s population can propel economic growth. The government’s vigorous championing of skill development is prompting the industry to take matching initiatives, which will eventually make the skilling process sustainable. A business case is emerging for all activities related to vocational training.

By Mrinmoy Bhattacharjee

A skilled workforce is one of the engines of economic growth. Nations that nurture an ecosystem for skilling through formal vocational training are able to better handle their issues of employment and incomes.

In India, barely 2.2% of its population between ages of 15 and 59 has received any form of formal vocational training, and only 8.6% have got non-formal training, as revealed by the National Sample Survey Office 2011-12 report. This grim reality is the result of a public perception that vocational training is the last resort for those who could not pursue a formal education system.

Thankfully now, the government is determined to change mindsets by making vocation aspirational. And for the first time in the history of the country, a national skill competition has been established that enables people to compete in skills as diverse as carpentry, painting, auto assembly, healthcare, beauty, graphic design, and aircraft maintenance. At IndiaSkills 2018, held in New Delhi this October, over 400 people competed for honours in 46 skills. The winners are now undergoing intensive training at the many institutes and workshops set up by India Inc so that they can represent the country at World Skills 2019 in Kaizan, Russia next February.

In the meanwhile, to steadfastly confront the perennial problems and bridge the skilling gap, the current government notified the formation of Department of Skill Development and Entrepreneurship in July 2014. Later, the department was upgraded to a full-fledged ministry – Ministry of Skill Development and Entrepreneurship (MSDE) – in November 2014. And in July 2015 the ministry launched the ‘Skill India’ campaign, with the aim to train over 40 crore people in at least one skill by 2022.

In order to fulfil this mega vision, the authorities have spent Rs 1,488.44 crore till January 2018, against a budgetary allocation of Rs 2,356.22 crore. The budget for 2018-19 is Rs 3,126.66 crore.

But more importantly, the discourse on skill development has brought about a reality check amongst the industry. Corporates and SMEs alike have realised that the bane is not so much the deficiency of skilled manpower but the absence of training avenues. It is a good sign that the corporate sector is becoming a stakeholder in the skilling game, by building infrastructure that addresses the requirements of communities rather than just internal. The story Sultans of Skillinglists some of the leaders from the building products industry who are contributing to the process of nation-building through their initiatives.

There are other organisations as well, that has displayed a deep commitment to the mission of planting a skill in the hands of people. Among them are Ashirvad Pipes that has launched the Ashirvad Plumbing School in Bengaluru, which has been nominated as Center of Excellence by the Indian Plumbing Sector Skill Council. According to the company, “Ashirvad Plumbing School is an institute developed on the understanding of the lack of professionally trained labour and employment opportunities in India. This institute, with state-of-the-art infrastructure and advanced syllabus, is a product of Skill India initiative by the central government.”

Paints major Asian Paints’ Colour Academy supports the National Skill Development Mission and assists in upskilling of the unorganised workforce. It has joined Karnataka Vocational Training and Skill Development Corporation to launch Colour Academy in ITI Peenya, Bengaluru for training their students. Participants at ITI Peenya will go through the BPC course, and after they complete the training the academy will help them get placement under known contractors. The company has spent Rs 22.33 crore in FY 2017-18 on this project.

Another paints leader AkzoNobel India has initiated skill training in decorative paints and vehicle refinish to promote employability among the youth. The Akzo Nobel Paint Academy has a presence in eight cities of India, including Delhi, Kolkata, Mohali, Bengaluru, Lucknow, Pune, Gorakhpur, and Kolhapur. It has trained over 1,475 youth and linked them with employment. The training includes modules on modern painting techniques, knowledge of paint surfaces and use of safety tools and PPE (Personal Protective Equipment). The company has spent Rs 5.2 crore in FY 2017-18.

Samir Patel, Director, ABM Wood Décor

Skilling is also being identified as a business growth engine. Samir Patel, director at Surat-based modular kitchens major ABM Wood Décor, informs that the company has devised orientation programmes for new employees that include 15 days training encompassing the company’s vision, mission, and culture, besides product training. “We are expecting to increase the productivity of the company’s employees by 20% and cut down costs by 10%. Our company has allocated a budget of Rs 30 lakh for 2018-19, Rs 40 lakh for 2019-20, and Rs 50 lakh for 2020-21 for the purpose of training and skill development,” he informs.

Patel adds, “Skilled employees will give more output in less time. Skilling helps us to delight our customers. In the furniture industry, we introduce innovative products every three to four months. We provide training to our employees at regular intervals. So, it helps them to keep themselves updated about the company’s products. It also becomes easy on their part to communicate about the benefits of the product to customers, after understanding their tastes and preferences.”

Gunjan Srivastava, managing director, and CEO at BSH Household Appliances, says that the company engages in skill development on three fronts: training workers and employees at factory for embracing best manufacturing practices, raising an army of skilled technicians and engineers across the country to be able to focus on customer service, and creating a large pool of sales and marketing people to rev up revenues.

“There is a correlation between investment in skill development, enhanced productivity and revenue growth. We have recorded a double-digit improvement in productivity. We have been pursuing our skill development initiatives for the last four to five years. Our company has grown at 35-40% CAGR in this period. As our business size increases, the company’s investment in skill development will also grow,” says Srivastava, adding that the company spends half percent of its India turnover on skill development.

Pidilite Industries has partnered with ITI Kapasan and ITI Jodhpur for the plumbing trade, and with ITI Jaipur for carpentry trade, as a part of its skill development initiative. During 2017-18, more than 3,500 students from 69 ITIs benefitted from carpentry, plumbing, and construction technician courses on account of Pidilite’s initiative. The company has also been an industry partner at four ITIs of Gujarat – Bhavnagar Mahila, Sachin, Jafrabad, Gota/Ranip, Ahmedabad.

“We carry out training activities for masons and supervisors in waterproofing and carpentry. We have tied up with 200 ITIs for the purpose. These initiatives help us in demand generation of our products and solutions,” says Dr Sanjay Bahadur, global CEO-construction chemicals, at Pidilite.

Clearly, skill development is emerging as an imperative for businesses that aim for sector leadership, or who simply want to boost their bottom-lines. Just as it was with computerisation and then digital technology, skilling is the new tsunami that could well blow away those who do not embrace it.